Gerd Klevenz’s (Head of Treasury Operations & Processes, Global Treasury, SAP) presentation in the ‘Corporate to Bank Connectivity, session at the Association of Corporate Treasurers Cash Management Conference in London last month was a fascinating glimpse into the battle for domination of corporate-to-bank connectivity, as we move into the era of global XML payment and process standardization.
Klevenz described how SAP treasury have been carrying out process optimisation and standardization to free up resources to increase the strategic scope of treasury operations by minimising the time and resources involved in executing treasury transactions.
Payment Factory Development
In the payment factory, the main actions taken were to:
- use SWIFTNet SCORE model (FIN/FileAct) for file transmission
- Global Formats for Payments/Reporting within SAP Group, in service 7x24
- STP (end-to-end) so that all messages are integrated into the SAP ERP systems with full payment status monitoring.
The main benefits of this development were business efficiency improvements, and compliance and security enhancements.
Payment Factory Connectivity
SAP’s payment factory uses a number of different connectivity options and one source file format, as figure shows.
SAP payment factory connectivity
Source & Copyright©2013 SAP AG
The use of local formats such as EBIC is combined with a SWIFT bureau and the SAP Financial Services Network (FSN).
Development of the Financial Services Network
FSN was launched in 2012 and is now well established. SAP have a standard procedure for corporates to connect to FSN, which they call this ‘cloud banking in three easy steps’, see figure.
FSN value proposition
Source & Copyright©2013 - SAP AG
There are currently several banks around the world trialling the system and some corporates are already connected to FSN.
The issue for corporate treasury is whether it will be easier for the 180,000 SAP ERP corporate users to connect direct to their banks via the FSN or via SWIFT. In the short term Klevenz does see SAP treasury getting rid of their SWIFT service bureau link, but in the longer “who knows?”
CTMfile take: This is a vitally important battle not only for SWIFT and SAP, but for corporate efficiency too. Watch this space.
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